The denominator in calculating return on equity is average common Stockholders' Equity.

Name: The denominator in calculating return on equity is average common Stockholders' Equity.
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Return on equity is calculated by dividing net income by average common stockholders' equity. The denominator is the average amount of equity that common shareholders have invested in the company, representing their ownership stake and the source of the company's capital.

The Denominator in Calculating Return on Equity Is Average Common